Dr. Johnson defines the term "specialization" and reasons for its development in our economy.
Video [2:10] and quiz teaches the concepts of Benefits of Trade and Comparative Advantage.
This page covers the theory of comparative advantage, biographical details and theories of the 19th century economist David Ricardo, and additional resources.
This article provides a thorough examination of comparative advantage, absolute advantage, and opportunity cost, and how these three terms are related.
In principles of economics students many times have trouble understanding the concept of opportunity cost, connecting opportunity cost to comparative advantage, and differentiating between absolute advantage and comparative advantage. This activity allows the instructor to detect whether a large number of students exhibit any of these misconceptions, and then focus on the most problematic concepts in class.
In principles of economics students many times have trouble understanding the concept of opportunity cost, connecting opportunity cost to comparative advantage, and differentiating between absolute advantage and comparative advantage. This activity allows the instructor to detect whether a large number of students exhibit any of these misconceptions, and then focus on the most problematic concepts in class.
Principles of Macroeconomics 2e covers the scope and sequence of most introductory economics courses. The text includes many current examples, which are handled in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition has been thoroughly revised to increase clarity, update data and current event impacts, and incorporate the feedback from many reviewers and adopters. Changes made in Principles of Macroeconomics 2e are described in the preface and the transition guide to help instructors transition to the second edition. The first edition of Principles of Macroeconomics by OpenStax is available in web view here.
By the end of this section, you will be able to:
Discuss how international trade influences the job market
Analyze the opportunity cost of protectionism
Explain how international trade impacts wages, labor standards, and working conditions
By the end of this section, you will be able to:
Define absolute advantage, comparative advantage, and opportunity costs
Explain the gains of trade created when a country specializes
By the end of this section, you will be able to:
Discuss the importance of studying economics
Explain the relationship between production and division of labor
Evaluate the significance of scarcity
Ricardian Explorer, implemented on the internet, simulates a Ricardian trade model with linear production technology and a CES utility function. The typical simulation has two countries and two goods. While Ricardian explorer was developed to supplement a course in international trade, it can also be used in intermediate microeconomics and microeconomic principles courses. The authors of the simulation are Alberto Isgut and Tanya Rosenblat of Wesleyan University.
Through illustrated notes and a related video, students will gain an understanding of comparative advantage and why trade is beneficial. [4:10]
This article from Hartford Web Publishing applies the concept of Comparative Advantage in today's world. Discussion of import and export explains how obstacles can be overcome.
